Census and HUD Data Indicates That Builders Are Not Bouncing Back
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Builders appeared to have remained cautious about the housing market in March,
pulling permits and starting construction on new houses in numbers little changed
from February.
The monthly data on new residential construction jointly released
by the U.S. Census Bureau and the Department of Housing and Urban Development
on Tuesday reported that permits for privately-owned housing units were issued
in March at a seasonally adjusted annual rate of 1,544,000, a scant 0.8 percent
above the revised February figure of 1,532,000. This is 25.9 percent below the
permitting rate in March 2006.
Permits for single family residences (SFR) as opposed to total
SFR/multi-family dwelling figures, were issued at a slightly higher rate, 1,114,000
which was 1.4 percent above the revised February figure of 1,099,000.
Permits were pulled at an annualized rate of 244,000 in the Midwest, an increase
of 16.7 percent over February and the Northeast increased 10.6 percent. In the
other two regions the month-over-month figures were negative in every case.
Changes year-over-year were down by double digits in every region.
Builders began building homes in March at an annualized rate
of 1,518,000 compared to an annual rate of 1,506,000 in February, an increase
of, again, 0.8 percent. The March figures were 23.0 percent lower than the rate
of building starts one year earlier. Single family house starts did slightly
better, increasing by 2.0 percent over February.
The Midwest was the superstar in this category. Single family starts increased
35.9 percent and total starts were up 44.5 percent over February. This may,
in part, be related to the truly awful weather throughout the Midwest that pretty
much stopped everything in its tracks in February. Every region was again lagging
the start rate one year earlier with a range of 19.4 to 25.9 percent.
Nation-wide there were 1,195,000 residential units under construction in March.
This was a slight (1.1 percent) decrease from a month earlier. There was, however,
a pretty substantial decrease in the proportion of single family units in that
total. One year ago, with 1,430 units under construction, 983 units were single
family residences and 408 were in projects with five or more units. Last month
the number of single family residences in progress was 760,000 while 402,000
units were in multi-family complexes. The Census/HUD data does not track properties
with two to four units in this category.
The number of outstanding permits - those issued but under
which no building has begun - increased 3.8 percent since February on a national
basis and were up in every region except for the total figure in the South;
again an indication that builders might have been planning on starting projects
but were thwarted by the weather. Given the rotten start we have seen thus far
in April it may be another two months before weather related influences can
be wrung out of the system.
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